With market elation over a Greek debt agreement, risk sentiment is anticipated to push the Canadian dollar to further gains opposite its currency neighbor, US dollar. However, price appreciation for the Loonie is likely to be limited as economic data from the world’s largest economy today are expected to disappoint the markets.
After three attempts to shore up Greece’s debt burden, its international lenders agreed to a plan to reduce its debt by 40 Billion Euros, while changing the debt target for the country to 124 percent of gross domestic product by 2020, from 120 percent previously. Though finance ministers and officials from the Euro Zone and the International Monetary Fund refused to take a haircut on their loans to Greece, they agreed to a package of steps to make the country’s debt sustainable. Measures included an extension of loan maturities, a cut in interest rates on its loans and a debt buyback scheme. Jean-Claude Juncker, the head of the Eurogroup of finance ministers, also said that Athens would receive a tranche of 34.4 Billion Euros of aid on December 13, which it has been waiting for since June.
Stock markets from Asia to Europe rallied on the news, signifying an increase in risk appetite as investors breathe a sigh of relief after the Greek debacle lasted long enough. Though the Greek saga is far from over, and Athens would likely be on the spotlight again in the future, the respite that the debt deal offers is enough to carry trades higher today.
From the United States today, a survey of about 5,000 households on the relative level of current and future economic conditions is expected for another uptick. The Conference Board Consumer Confidence report is estimated to report a grade of 73.1 for the current month, after climbing successively for the past two months. Ratings of 68.4 and 72.2 were registered for the months of September and October, respectively.
Risk appetite is deemed to keep the markets afloat today, after positive sales figures from Black Friday to Cyber Monday. Add these to Greek debt accord, and the Loonie is believed to benefit. The USDCAD is recommended to be sold, though technical price corrections are still probable.
What could likely bear on the USDCAD exchanges today however, are reports from the Census Bureau that demand for durable goods probably slumped in October. Business spending is believed to have declined prior to the US elections as investors opted to wait for who will win the presidency, and if the eventual head of state would be able to steer the economy out of a looming fiscal cliff. Both Durable Goods Orders and Core Durable Goods Orders are forecast for a minus 0.6 percent change during the period. Orders during the previous release showed that core orders stalled, while bookings for goods posted at 9.8 percent. Should the actual figures register at the median estimate or even lower, Loonie gains could likely be limited.
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